Usually not many currencies have changed except for the aussie and kiwi today. Both antipodes are being pulled lower, breaking to new levels for the year. AUD/USD is down 0.4% to 0.6311 now on a break of key technical support from the August low marked here. Meanwhile, NZD/USD is down 0.3% to 0.5735 to its lowest level since November 2022 as it clings to the strong break below 0.5800 from last week.
That at least makes for some interesting moves before we get to the FOMC meeting later. In broader markets, equities remain more uncertain while bond sales are also taking a breather. All eyes are now on the Fed and that is the main event that traders will be looking to react to next.
Coming up in European trade, inflation data will be on the cards. The one in the UK will be watched the most because it comes before the BOE policy decision tomorrow. But with annual core inflation and core inflation expected to come in higher than the previous month, it should just reaffirm the BOE's decision to hold off this week.
The OIS market is already pricing in ~93% of BOE leaving the bank rate unchanged. Therefore, any upside for the pound may be more limited. That being said, the odds of a February rate cut are closer to 50-50 right now. Therefore, higher price pressures here could still lift the quid as traders tone that down.
Annual headline inflation is estimated to come in at 2.6%, up from 2.3% previously. Meanwhile, annual headline inflation is expected to come in at 3.6%, up from 3.3% previously.
As for Eurozone inflation data, these are the final figures for November. Therefore, the effect is likely to be more moderate.
0700 GMT – UK November CPI figures
1000 GMT – Eurozone November CPI final figures
1100 GMT – UK December CBI total orders movements
1200 GMT – US MBA mortgage applications we 13 December
That's all for the next session. I wish you a great day ahead and good luck with your business! Stay safe out there.
